Israel Aircraft Industries

IAI is the centerpiece of Israel's armaments industry. It has grown rapidly from a company of less than 100 employees when founded to more than 20,000 today. IAI produces a wide range of items, some under license, including aircraft (such as the Fouga-Magister), ammunition, armor, radar/ sonar, and gyroscopes.

The idea to form an aircraft industry combining the special security needs of Israel with the development of industry originated in the Ministry of Defense during the 1950s. The reasons were that Israel's strategic situation depended on a capability to manufacture arms, the high costs of foreign-made arms, and the fear of an arms embargo. Maintenance was a problem for both the air force and El Al, which was dependent upon maintenance facilities abroad. The need to establish an aeronautical and technological center in Israel was acute.

Al Shwimmer, an American aeronautical engineer who served in the Israeli air force, established a small factory in California called Intercontinental Airways, which dealt mainly with repairing old airplanes. In 1951, he met with Shimon Peres, then the head of an Israeli arms acquisition delegation, and proposed that his company look for scrap metal for Mustang planes (which were then very popular in the Israeli air force), renovate the planes, and send them to Israel. The idea was broached with Prime Minster and Defense Minister David Ben-Gurion, who accepted it. Ben-Gurion proposed that Shwimmer relocate the factory to Israel, and this was the beginning of IAI.

Shwimmer submitted his proposal for the establishment of an aircraft industry to the prime minister, included two projects calling for the establishment of a base in Israel that would be able to repair and overhaul all types of aircraft, both military and civilian, including engines, and the independent production of planes in Israel.
The second project was not accepted by the government because it seemed unrealistic. The first, however, was to be fulfilled by creating Bedek, a company established in 1951 according to a special agreement between Shwimmer and the government. The factory grew quickly. In the early 1960s, Bedek's management decided to proceed with the original proposal to attempt to produce new aircraft in Israel. Among the problems they encountered was the lack of a crystallized and experienced engineering body, which was reflected in the manufacturing of the Fuga and the "Stratocruiser." However, this problem was solved by the mid-1960s.

in 31 March 1968, Bedek was transformed from a subdivision of the Ministry of Defense to an independent company. It then was divided into three units: the Bedek-Metosim unit, which primarily dealt with the repair and rebuilding of airplanes; the aircraft manufacturing unit, which focused on the manufacture of new aircraft; and the engineering unit, which dealt with research and development. That same year, the company took upon itself, for the first time, the design and manufacture of a whole plane, the Arava, which was a light plane carrying up to 20 people that could land and take off on short runways. The Arava was produced in both a civilian and military version. In the early 1970s, Bedek revised its goals and decided to produce a fighter plane. The first such plane was the Kfir.

Other than production and repair of aircraft, IAI also deals with the production of other sophisticated weapons systems, such as the Ma-zlat (the Hebrew acronym for pilotless aircraft). Among these weapons systems was the Gabriel, a sea-to-sea missile. The Gabriel later became one of IAI's primary export items. In addition, IAI produces several ships, such as the Dabour-class corvettes, armored vehicles, electrical and communication systems, helicopters, and so on. Many of these products are produced by one of the company's numerous subsidiaries, including Alta, Tama, Mabat, Shahal, Pamal, and others.

On the mid-1990s, IAI came under the scrutiny of a government commission mandated to examine the future of Israel's defense industry. The Peled Commission concluded that in order to compete in the future, the Israeli defense industry would have to undergo significant structural change. At the core of this change would be IAI itself, which, according to the commission's recommendations, would concentrate on all aviation and space technology research and development, including aircraft upgrades, avionics and photographic systems, developing and manufacturing pilotless aircraft, missiles and missile launchers, and satellites. In October 2006, several Israeli companies were listed among the top 100 arms dealers in the world: IAI, Rafael Arms Development Authority, and Israel Military Industries.